The secret behind the hot sales of "The Road to Serfdom" by free-market economist F. A. Hayek

By Bruce Caldwell

Friedrich Hayek, Nobel-prize winning economist and well-known proponent of free markets, is having a big month. He was last seen rap-debating with John Maynard Keynes in the viral video above, (in which Hayek is portrayed as the sober voice of reason while Keynes overindulges at a party at the Fed). His 1944 book, "The Road to Serfdom," provided the theme for John Stossel's Fox Business News program on Valentine's Day.

Hayek, who died in 1992, is also reemerging as a bestselling author. A new edition of Hayek's seminal book, "The Road to Serfdom," was published in March 2007 by the University of Chicago Press as part of a series called "The Collected Works of F. A. Hayek," for which I serve as editor. For over a year-and-a-half, the book sold respectably, at a clip of about 600 copies a month.

But then, in November 2008, sales more than quadrupled, and they haven't slowed down since. What's more, the Kindle edition went on sale in late May 2009 and is now the best-selling book that the University of Chicago Press has offered in that format. This would be a pretty good sales record for a contemporary author, but it is nothing short of amazing for a book originally published in 1944, and by an economist, no less.

What accounts for it? I would like to think that it's due to the exceptional editing I did on the volume, but, alas, I think there is something larger going on.

First off, the November 2008 sales spike date certainly suggests that Obama's election and the passing of control of both houses of Congress to the Democrats may have been an initial factor. The Republicans had been walloped, and some sought principled arguments that could be used to combat the policies of the party in power.

Even though Hayek himself disdained having his ideas attached to either party, he nonetheless provided arguments about the dangers of the unbridled growth of government.

Another early impetus may have been the characterization of the health care debate as being about socialized medicine. Hayek, whose book is perhaps the most famous attack on socialist central planning, would naturally be invoked by the health plan's opponents.

But perhaps the biggest stimulus to sales was, well, the stimulus package. The macroeconomic analyses of John Maynard Keynes had gone quickly out of vogue in the 1970s, when a decade of stagflation delivered a death blow to the notion of Keynesian fine-tuning of the economy. But in early 2009, people were talking about Keynes again, and indeed the fiscal stimulus package, to the extent that it had a theoretical underpinning, would find one in Keynesian economics. (The Fed's policy of flooding the financial system with liquidity, on the other hand, finds its grounding in the economic analysis of Milton Friedman, the father of monetarism, a doctrine that used to be portrayed in introductory macroeconomics classes as the chief rival to Keynesian thought.)

Because Keynes and Hayek actually did have a great debate over their rival theoretical models of a monetary economy in the early 1930s, just as the Slump of 1930 was turning into the Great Depression, it seemed natural for opponents of these policies to turn to Hayek's writings. (For those who are interested in this episode, I recommend a perusal of volume 9 of The Collected Works, Contra Keynes and Cambridge.)

Not only is "The Road to Serfdom" still relevant in our own time, it has something else going for it, too. It is actually readable. Anyone who has tried to master Keynes's "General Theory," or for that matter Hayek's rival title "Prices and Production," will find the going pretty tough.

Not so for "The Road to Serfdom," a book that was condensed by Reader's Digest in April 1945, just as the war in Europe was ending. Plus, "The Road to Serfdom" is, simply put, a great, evocative title. And with 10 percent unemployment, people certainly have more time to read it.

In the end, however, I think that the underlying reason for the sustained interest in Hayek's book is that it taps into a profound dissatisfaction in the public mind with the machinations of its government. Both Presidents Bush and Obama have presided over huge growth in the size of the federal government and in the size of the federal deficit, with little obvious effect on unemployment. Things seem out of control.

Furthermore, a recurrent theme in the news is that, in contrast to the millions who are suffering, the politically connected are doing just fine. The examples are everywhere, from bailed out financiers getting huge bonuses to public union employees getting hefty pensions, from auto companies that are nationalized instead of going belly up to politically savvy firms that get government subsidies to produce products that would be otherwise unprofitable.

For people upset by such trends, "The Road to Serfdom" opens a window onto another time, when debates about how best to restructure an economy emerging from wartime were taking place. Such debates, as the strong sales of the book clearly show, still have resonance today.

-- Bruce Caldwell is a professor of economics and director of the Center for the History of Political Economy at Duke University and general editor of "The Collected Works of F. A. Hayek."

Comments

Not only has there been renewed interest in the economic theories of Hayek, but also there is much interest in Ludwig von Mises and Murray Rothbard. For example, in Mises' work "Nation, State and Economy" he discusses the impact of currency disruption on a nation’s economic, social, and political order. His analysis within the context of Germany and Austria and the events leading up to World War I reveal historical insight that is important today when the world economic order is being challenged.

Also Mises seminal work, "The Theory of Money and Credit" (Signalman Publishing, ISBN: 9781442175952) argues, as an anti-inflationist, that any unsound credit expansion results in volatile business cycles. Von Mises advocated the gold standard as a return to sound money, thereby wresting the control of the economy from a centralized state authority (i.e. the Federal Reserve) to a standard that is neither inflationary nor deflationary.

With the recent massive monetary expansion that we have been undergoing and the pending period of inflation, I think people will be even more interested in the works from notable economists like von Mises, Hayek, and Rothbard whose theories will certainly be tested for validity in today's world.

Thanks for the article!

Posted by: Avid-Reader | February 17, 2010 10:48 AM

Well, good. That was one of 4 or 5 books I've read in my life that I can truly say was paradigm-shifting.

Somebody should send President Obama a copy.

Posted by: ContrarianLibertarian | February 17, 2010 4:55 PM

HAYEK ON CONSERVATIVES
From "Why I am not a Conservative" in The Constitution of Liberty (Chicago: The University of Chicago Press, 1960):

Let me return, however, to the main point, which is the characteristic complacency of the conservative toward the action of established authority and his prime concern that this authority be not weakened rather than that its power be kept within bounds. This is difficult to reconcile with the preservation of liberty. In general, it can probably be said that the conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes. He believes that if government is in the hands of decent men, it ought not to be too much restricted by rigid rules. Since he is essentially opportunist and lacks principles, his main hope must be that the wise and the good will rule - not merely by example, as we all must wish, but by authority given to them and enforced by them.[7]